FOR PUBLICATION

ATTORNEY FOR APPELLANT: ATTORNEYS FOR APPELLEES:

Attorneys for Thomas A. and Mary E.Young

ROBERT J. PALMER PHILLIP R. TERRILL

May Oberfell Lorber MARK A. THOMA

Mishawaka, Indiana Leonard, Hammond, Thoma & Terrill

Fort Wayne, Indiana

IN THE

COURT OF APPEALS OF INDIANA

_____________________________________________________________________________

STATE FARM INSURANCE COMPANY, )

)

Appellant-Third Party Plaintiff/Defendant, )

)

vs. ) No. 92A05-1205-CT-258

)

THOMAS A. YOUNG and MARY E. YOUNG, )

)

Appellees-Plaintiffs, )

)

JOEL P. GENTH and PHILIP K. GENTH, )

)

Appellees-Defendants, )

)

INGENIX, )

)

Appellee-Third Party Defendant. )

APPEAL FROM THE WHITLEY CIRCUIT COURT

The Honorable James R. Heuer, Judge

Cause No. 92C01-0910-CT-664

March 15, 2013

OPINION - FOR PUBLICATION

MAY, Judge
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State Farm Insurance Company (hereinafter, “Policy One”)

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appeals an order reducing

the subrogation lien that Policy One held against Thomas and Mary Young. We affirm.

FACTS AND PROCEDURAL HISTORY

On December 4, 2007, Joel Genth was driving a car owned by his father, Philip Genth, 

and insured with State Farm Insurance Company (hereinafter “Policy Two”). Genth’s 

vehicle struck Thomas Young’s vehicle from behind. Thomas suffered physical injuries for 

which he sought treatment. Thomas’s medical insurance company, Ingenix, and Policy One

paid for those treatments. 

On October 29, 2009, the Youngs sued Philip and Joel Genth. As part of their

damages, the Youngs listed two subrogation liens – one to Ingenix for $19,276.61, and one to 

Policy One for $5,000. The parties entered mediation, and Policy Two offered to settle the 

Youngs’ claim for $17,432.00, which was less than the total of $24,276.61 the Youngs owed 

in subrogation liens.

As the settlement offer was less than the amount due in subrogation liens, the Youngs 

filed a motion to reduce the subrogation liens pursuant to Ind. Code § 34-51-2-19, which 

provides:

If a subrogation claim or other lien or claim that arose out of the payment of 

medical expenses or other benefits exists in respect to a claim for personal 

injuries or death and the claimant’s recovery is diminished:

(1) by comparative fault; or

(2) by reason of the uncollectibility of the full value of the claim for 

personal injuries or death resulting from limited liability insurance or 

from any other cause;

 

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State Farm insured both the Youngs and Genth. For clarity, we refer to the Youngs’ State Farm policy as 

“Policy One” and the Genth’s State Farm policy as “Policy Two.” 
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the lien or claim shall be diminished in the same proportion as the claimant’s 

recovery is diminished. The party holding the lien or claim shall bear a pro 

rata share of the claimant’s attorney’s fees and litigation expenses.

In their motion, the Youngs asserted they should be responsible for only 17.43% of the value 

of each subrogation lien because they were receiving only 17.43% of Genth’s $100,000 

policy limit. 

Prior to the hearing on the Youngs’ motion, Ingenix accepted a reduction of its 

subrogation lien from $19,276.61 to $2,410.84. That reduction represents a decrease to

17.43% of the lien, minus Ingenix’s pro rata share of the attorney fees. See Ind. Code § 34-

51-2-19 (“The party holding the lien or claim shall bear a pro rata share of the claimant’s 

attorney’s fees and litigation expenses.”). 

Policy One agreed to reduce the amount of its lien against the Youngs from $5,000 to 

$3,250, which accounts for its pro rata share of the attorney fees plus $100.

2 Policy One 

would not agree to reduce the lien to 17.43% of its value.

After a hearing, the court reduced the subrogation liens and ordered Policy One to 

accept $581, which represents 17.43% of the value of its original subrogation lien, minus 

Policy One’s pro rata share of attorney’s fees and litigation expenses pursuant to Ind. Code § 

34-51-2-19. Sixteen days after the court entered its order reducing the liens, the Youngs and 

Joel and Philip Genth stipulated to dismissal with prejudice of the Youngs’ personal injury 

 

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It is not clear from the record what the $100 represents. At the reduction in subrogation lien hearing, Policy 

One stated, “So it’s [Policy One’s] position that they’re entitled to the full amount of their lien minus the onethird statutory reduce [sic] in attorney fees. They have agreed to take another $100 off that and accept 

$3,250[.]” (Tr. at 6.)
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action, indicating the matter had been settled.

DISCUSSION AND DECISION

In reducing the subrogation liens, the trial court sua sponte made findings of fact and 

conclusions of law. In such a case, our standard of review is well-settled:

Where the trial court enters specific findings sua sponte, [ ] the specific 

findings control our review and the judgment only as to the issues those 

specific findings cover. Where there are no specific findings, a general 

judgment standard applies and we may affirm on any legal theory supported by 

the evidence adduced at trial.

We apply the following two-tier standard of review to sua sponte

findings and conclusions: whether the evidence supports the findings, and 

whether the findings support the judgment. Findings and conclusions will be 

set aside only if they are clearly erroneous, that is, when the record contains no 

facts or inferences supporting them. A judgment is clearly erroneous when a 

review of the record leaves us with a firm conviction that a mistake has been 

made. We consider only the evidence favorable to the judgment and all 

reasonable inferences flowing therefrom, and we will neither reweigh the 

evidence nor assess witness credibility. While we defer substantially to 

findings of fact, we do not do so to conclusions of law. We evaluate questions 

of law de novo and owe no deference to a trial court’s determination of such 

questions.

Trust No. 6011, Lake County Trust Co. v. Heil’s Haven Condominiums Homeowners Ass’n, 

967 N.E.2d 6, 14 (Ind. Ct. App. 2012) (citations omitted). 

Policy One argues the trial court erred when it reduced the amount of its subrogation 

lien against the Youngs. Subrogation is a long-standing doctrine of equity in which a party, 

not acting as a volunteer, pays the debt of another that, “in good conscience, should have 

been paid by the one primarily liable.” Wirth v. Am. Family Mut. Ins. Co., 950 N.E.2d 1214, 

1216 (Ind. Ct. App. 2011). When a claim of subrogation is recognized, “a court substitutes 

another person in the place of a creditor, so that the person in whose favor it is exercised 
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succeeds to the right of the creditor in relation to the debt.” Erie Ins. Co. v. George, 681 

N.E.2d 183, 186 (Ind. 1997). Ultimately, the purpose of the doctrine is to prevent unjust 

enrichment. Id.

The trial court concluded “I.C. 34-51-2-[1]9 is applicable.” (Appellant’s App. at 7.) 

That statute provides, in relevant part, that a lien “shall be diminished” if “the claimant’s 

recovery is diminished” because “the full value of the claim for personal injuries” is 

uncollectible. Ind. Code § 34-51-2-19. Here, the record leaves no doubt the “claimant’s 

recovery” was diminished. Policy Two would not pay more than $17,432.00 to settle the 

Youngs’ suit against the Genths, while the Youngs owed $24,276.61 in subrogation liens and 

their suit also prayed for unspecified damages for pain and suffering, loss of earnings, and 

loss of consortium. Thus, the Youngs were not going to receive the full value of their claim.

In light of the unusual facts before us, i.e., that State Farm issued both Policy One and 

Policy Two, we decline to adopt State Farm Policy One’s premise that its subrogation lien 

should not be reduced based on State farm Policy Two’s refusal to pay the full amount of the 

Youngs’ claim. The purpose of subrogation is to avoid unjust enrichment. George, 681 

N.E.2d at 186. State Farm paid under Policy One for some of the Youngs’ damages, and thus 

was entitled to a subrogation lien. But “the one primarily liable,” Wirth, 950 N.E.2d at 1216, 

and who “in good conscience should have been” paying, id., was State Farm under Policy 

Two. Therefore, to allow State Farm to recover the full value of its subrogation lien under 

Policy One, when State Farm did not pay the full value of Youngs’ claim under Policy Two, 

would unjustly enrich State Farm.
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As we may “affirm on any legal theory supported by the evidence adduced at trial,” 

Trust No. 6011, 967 N.E.2d at 14, we affirm the decision of the trial court.

Affirmed.

ROBB, C.J., and PYLE, J., concur.